Earnings (Loss) Per Common Share
The reconciliation of the numerator and denominator used for the computation of basic and diluted earnings (loss) per common share follows:
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| Years Ended December 31, |
| (in millions, except per share data) | 2025 | | 2024 | | 2023 |
| Numerator for basic and diluted earnings (loss) per common share: | | | | | |
| | | | | |
| | | | | |
| Net income (loss) | $ | (527) | | | $ | 116 | | | $ | 210 | |
| Less: preferred stock dividends | 35 | | | 19 | | | — | |
| Less: undistributed income allocated to preferred stockholders | — | | | 6 | | | — | |
| Net income (loss) available to common stockholders | $ | (562) | | | $ | 91 | | | $ | 210 | |
| | | | | |
| Denominator for basic and diluted earnings (loss) per common share: | | | | | |
| Basic | 149 | | | 146 | | 147 |
| Plus: dilutive effect of common stock equivalents | — | | | 3 | | 1 |
| Weighted average diluted number of common shares outstanding | 149 | | 149 | | 148 |
| | | | | |
| Earnings (loss) per common share | | | | | |
| | | | | |
| | | | | |
| | | | | |
| Basic | $ | (3.77) | | | $ | 0.62 | | | $ | 1.43 | |
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| | | | | |
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| Diluted | $ | (3.77) | | | $ | 0.61 | | | $ | 1.42 | |
Diluted earnings (loss) per common share is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the if-converted method and treasury stock method using the average market price of our common stock for the period, except when the inclusion of such instruments would be antidilutive.
The following potentially dilutive instruments, presented as a weighted average of the instruments outstanding, were excluded from the calculation of diluted (loss) earnings per common share because their effect would have been antidilutive, and in the case of certain PSUs, the contingency has not been satisfied.
| | | | | | | | | | | | | | |
| | Years Ended December 31, |
| (in millions) | | 2025 | 2024 | 2023 |
| RSUs and other rights | | 5.9 | | 0.7 | | 1.5 | |
| PSUs | | 2.5 | | 0.7 | | 1.2 | |
| Preferred stock | | 0.5 | | 0.3 | | — | |
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.